Yahoo has acquired a stake in Indian Internet advertising company Tyroo Media to help it capture more of the country's fast-growing online ad market.

Yahoo acquired between 35 per cent and 50 per cent of Tyroo for an undisclosed amount of money, said George Zacharias, managing director of Yahoo India, in a telephone interview Wednesday.

Tyroo, based in Gurgaon, places advertisements on a network of about 1,200 Web sites. Its service is suitable for smaller businesses, allowing them to design graphic or text-based ads and choose Web sites that will bring them a targeted audience, said Harish Bahl, CEO of Smile Interactive Technologies Group, of which Tyroo is a part.

The advertisers do not need to have their own Web sites -- which small Indian businesses often do not have -- since buyers can contact them via email or SMS (short messaging service), he said.

Yahoo started its search-based advertising business in India about eight months ago and so far has a few thousand small advertisers, Zacharias said. There are millions of potential advertisers in India, which all the search companies and advertising networks are chasing, he added.

The deal with Tyroo will allow Yahoo to grow its business with third-party publishers in India while it prepares to bring its revamped advertising system, codenamed Panama, into the country, along with technology it acquired from Right Media, Zacharias said.

Yahoo announced in April that it would buy the remainder of Right Media, an online exchange where advertisers and publishers can buy and sell display advertising on Web sites. The relationship with Tyroo will continue after the Panama and Right Media technologies are introduced to India, Zacharias said.

The companies will also integrate their back-end systems so that advertisers on Yahoo and Tyroo can access to each other's networks, Bahl said. The companies will remain independent, however, he added.